Qualify FHA loan 2016

Qualify FHA loan 2016

Minimum credit score

New FHA policy requires a minimum credit of 500 to buy a house. FHA did not require any credit score before 2010.

Borrowers with credit score above 580 require a 3.5% down payment. The funds can be a gift from a family member and a 6% seller's concession is allowed. 

If you have a credit score below 580, new FHA changes require a 10% down payment. The funds can be a gift from a family member and a 6% seller's concession is allowed.

Collection accounts

FHA does not require collection accounts to be paid off as a condition of mortgage approval. However, FHA does recognize that collection efforts by the creditor for unpaid collections could affect the borrower’s ability to repay the mortgage.

• If evidence of a payment arrangement is not available, the lender must calculate the monthly payment using 5% of the outstanding balance of each collection, and include the monthly payment in the borrower’s debt-to-income ratio.

Extenuating circumstances

Borrowers may also be eligible for an FHA insured loan on a purchase transaction after 12 months from the completion, discharge, trustee's sale if the borrower meets the requirements for extenuating circumstances Economic Event.

Borrowers with a prior bankruptcy, foreclosure, deed-in-lieu, or short sale may be eligible for an FHA insured loan if the bankruptcy, foreclosure, deed-in-lieu, short sale was the result of a documented extenuating circumstance.

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Mortgage World Home Loans is an online mortgage company specializing in FHA loans for first time home buyers. To buy a house with 3.5% down payment and a minimum credit score of 580 using an FHA loan apply now.

We look forward to working with you.

We look forward to working with you.

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